Clariant and Huntsman to combine

Clariant and Huntsman Corporation have announced that their Boards of Directors unanimously approved a definitive agreement to combine in a merger of equals through an all-stock transaction.

The merged company will be named HuntsmanClariant. On a pro forma 2016 basis, the combination of both companies will create a leading global specialty chemical company with sales of approximately US$13.2 billion, an adjusted EBITDA of US$2.3 billion and a combined enterprise value of approximately US$20 billion at announcement.

The combined entity will benefit from each other’s strengths. It will have a significantly improved growth profile in highly attractive end markets and geographies. HuntsmanClariant will leverage shared knowledge in sustainability and boast a much stronger joint innovation platform. This will enable the development of new products in order to deliver superior returns and drive shareholder value.

Transaction highlights

All-stock merger of equals transaction.

Clariant shareholders: 52%, Huntsman shareholders: 48%.

Huntsman shareholders receive 1.2196 shares in HuntsmanClariant for each Huntsman share (each existing Clariant share will remain outstanding as a share in HuntsmanClariant).

Board of Directors with equal representation from Clariant and Huntsman.

Dual stock exchange direct listing on the SIX Swiss Exchange and the New York Stock Exchange.

Value creation.

The new company will accelerate value creation for shareholders through a more robust combination of technology, products and talent. The combined company expects to realise more than US$3.5 billion of value creation from approximately US$400 million in annual cost synergies. The full synergy run-rate will be achieved within two years of closing. These synergies will be realised by reducing operational costs and improving procurement. The targeted synergies represent roughly 3% of total combined 2016 revenue with one-time costs up to US$500 million. There will also be additional cash-tax savings.

The transaction is targeted to close by year end 2017, subject to Clariant and Huntsman shareholder approvals, regulatory approvals and other customary closing conditions. Clariant and Huntsman are confident that the required regulatory approvals can be obtained in a timely manner.